Citigroup has announced a significant reduction in its workforce, slashing 20,000 jobs over the forthcoming years. This decision, part of a comprehensive corporate restructuring, was disclosed following the release of the New York-based bank's fourth-quarter financial results, which highlighted a substantial loss.
Jane Fraser, Citigroup's Chief Executive, has been at the forefront of reshaping the organization, transitioning from two business lines to a more streamlined structure of five. This reorganization is a key component of Fraser's strategy to simplify Citigroup's operations, thereby facilitating swifter decision-making processes, improving client services, and ultimately unlocking greater value for shareholders. Fraser emphasized the transformative nature of these changes last month, underscoring their alignment with the bank's overarching strategy and operational approach.
Citigroup's downsizing plan will reduce its workforce to approximately 180,000 by 2026, a notable decrease from the 240,000 employees at the end of 2022. This reduction also reflects the anticipated divestiture of Citigroup's Mexico subsidiary, Banamex. In line with this strategy, Citigroup has already significantly scaled back its global consumer banking presence, exiting markets in China, Vietnam, and other regions.
The financial results for the fourth quarter painted a stark contrast to the previous year, with Citigroup reporting a loss of $1.9 billion, in stark comparison to the $2.5 billion profit in the same period of 2022. Revenues dipped by three percent to $17.4 billion. The loss was exacerbated by a series of costs related to the restructuring, including $780 million allocated for severance and other related expenses. According to Mark Mason, Citigroup's Chief Financial Officer, this charge is linked to the initial phase of job cuts, numbering around 7,000 in the next year.
The bank also incurred additional one-time expenses, including a $1.7 billion special assessment to replenish the Federal Deposit Insurance Corporation (FDIC) emergency fund following the collapses of Silicon Valley Bank and Signature Bank. Citigroup also set aside reserves of $1.3 billion for risks associated with its operations in Argentina and Russia and faced a financial impact of $880 million due to the devaluation of the Argentine peso.
This comprehensive restructuring and cost-cutting effort underscores Citigroup's commitment to revising its business model in response to a challenging global financial landscape. The bank's leadership is focused on navigating these turbulent times while positioning the institution for long-term, sustainable growth.
